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Don't go west, go to Entrepreneur Country

01 April 2014

Start-up champion Julie Meyer talks about success, wealth and innovation

Julie Meyer steps out of the boardroom mid-interview to freshen up. She is not gone longer than five minutes but when she returns she is wrestling with a currency sum. Her client Seamless has landed more than 300 million Swedish krona in funding and, when armed with the exchange rate, she does one terrifyingly quick calculation and announces that her company Ariadne Capital has made £300,000.

It seems a striking confirmation of her maxim that if you have the right ideas and articulate them well, the money will find you. Ariadne Capital is an investment and advisory firm formed by Meyer in 2000 that matches tech start-ups with established entrepreneurs and corporates so they can grow and share revenues. She has form when it comes to championing tech entrepreneurs having been involved in deals with Skype, Monitise and Zopa.

Meyer, who was raised in Palo Alto, California, first came to the UK in 1986 to study for a year at Cambridge University as part of a degree in Humanities and English Literature and returned to Europe to live in Paris at the age of 21. “I tried to study French and I couldn’t handle the fact I tried to do something and it was unsuccessful,” she says.

“So, I said ‘it’s over to Paris you go and figure out the language’. The experience gave me confidence to go where you don’t know anybody, figure it out, and really understand how the market values what you do. Without home turf advantage, you have to figure out quickly how you’re going to make your livelihood, how the market perceives you.”

And after moving to London (which she describes as the “centre of the anglosphere”) in 1998 it did not take her long to find her niche. Within months she was working with a venture capital firm and had established networking organisation First Tuesday, which allowed Internet start-ups and financial backers to meet. It eventually sold for $50 million in cash and shares, allowing Meyer to set up Ariadne Capital.

It is a sizeable market opportunity to build that structuring opportunity so entrepreneurs can not only come from nowhere, but be successful anywhere. That’s what we’re doing. I want to be on that side of history.

 Still London-based today, she is evangelical about the strength of British tech firms and how borders are irrelevant to the success of start-ups. "Having just had breakfast with the great Greek entrepreneur behind Matternet, who’s building a whole new ‘go aerial’ strategy in the transportation industry, aka drones, I know great entrepreneurs can come from anywhere. Niklas Zennström [co-founder of Skype] was an obscure Swedish entrepreneur with a base in Estonia when we started working with him 10 years ago. 

"And yet, the structure and infrastructure haven’t caught up. It is a sizeable market opportunity to build that structuring opportunity so entrepreneurs can not only come from nowhere, but be successful anywhere. That’s what we’re doing. I want to be on that side of history."

Meyer published her book welcome to entrepreneur country in 2012 in which she attempts to explain how society is reorganising itself and encourages everyone to embrace these changes.  Ariadne Capital helps entrepreneurs back entrepreneurs and has 60 leading businesspeople as core shareholders.  In September 2013 she launched the entrepreneurcountry global network with representatives in 15 regions, establishing a community connecting corporates and startups and building a searchable database.

“Our vision is that great entrepreneur-led start-ups – the Davids – and large companies – the Goliaths – must dance. David brings new digital revenues to Goliath: he brings distribution to David.

“I wouldn’t pigeon-hole it as venture capital. I would say I am there to facilitate the success of entrepreneurs that I believe really have something positive to add to the world and who work towards the common good. I think that is one of the most profitable things you can do. This is not CSR; the best thing you can do is create value for the common good. When you do that, you create sustainable, profitable, valuable businesses.

“Every entrepreneur has a customer acquisition problem: how are they going to acquire customers? Are they just going to deal with an app marketplace, or can they actually work with the local mobile carrier and the bank and the retail shop and all those non-tech companies? It is clear that technology businesses are taking over the world. If you are a bog-standard bank or retailer, and are not thinking about disruptive economics, if you’re not kept awake by that, you’ve got a big problem.”

She sees their role as a delicate balance of backing entrepreneurs but also often providing a moderating influence. 

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“Our vision is that great entrepreneur-led start-ups – the Davids – and large companies – the Goliaths – must dance. David brings new digital revenues to Goliath: he brings distribution to David."

“The dominant thing that entrepreneurs have is an ego not under check. Most of society learns to keep it in check. We don’t allow people with big egos to run things because we will bop them down to size. What I do in my role is try to appreciate and respect the ego of the entrepreneur and say ‘hey, I think you can do it too’. But I also act as the voice of reality on how we can be successful.”

Meyer has seen what it takes for a small business to survive explosive growth and says a balance must be struck between the skills of the entrepreneur, chairman, product techs and business salespeople.

“You need people around you that believe in you and care about the company. When you think of children turning into good adults, how does that happen?Through a good family,” she says. “I’ve seen the bad stuff and have an idea how to build a positive architecture for a business that has to get into rapid growth mode, and if it doesn’t get those foundations in place by the time it’s hurling through the atmosphere – talk about explosive!”

Away from Ariadne Capital, Meyer starred in the online version of the BBC’s Dragon’s Den and is currently setting up a Dads and Daughters Foundation to support her thesis that women’s identities are shaped – for good or bad – by the messages they receive from their fathers as children. She sits on Vince Cable’s Entrepreneurs Panel, but, as with many in business, would prefer politicians to keep their interference to a minimum.

“For me it’s interesting, but not essential to follow what the Government does. I think the positive thing that is happening is that technology is helping create collective action and social justice. We can decide that we want to see a specific school infrastructure, or a homeless shelter or whatever we want for our local environments and we can, as a community, leverage a lot of things driven by new technological services and create that same collective action. And we can do that more cheaply, and more effectively.

“Strong people have a responsibility to care for weaker people. But I don’t believe that the Government, as it is currently structured, does that effectively. I see the entrepreneurs as problem solvers and when I see people tackling social problems effectively with an entrepreneurial mind, I get really excited. I’d rather see that than watch the Government pump more public money into solving the problem. I believe if you reduce that percentage of tax overall, you’re going to get more revenue. There are many things we can do for SMEs.”

Meyer sees these SMEs and their wealth creation as the key to recovering from the global financial crisis alongside a readjustment of the relationship between financial services and industry.

I’m a financier, but financial services is not an industry, it’s a service industry. Throughout history, capital has followed ideas. Queen Isabella put Christopher Columbus on a retainer but he’s the guy that found the New World. It’s not about the Medici family, it’s about Michelangelo and Leonardo da Vinci.

“For a while we lost the concept of what is business. It’s about the people who are building the business and not the financiers who are essentially very high-priced employees making a cut for providing finance. That readjustment and reattaching financial services to industry are the positives coming out of the financial crisis. But there shouldn’t be a question in anyone’s mind at this point that you have to create wealth.”

And when the recovery does kick in, where will the big growth areas be?

“Transportation is an industry we are very interested in. I’m interested in drones and the impact an aerial strategy could have when you look at the economics of building roads,” Meyer says.

“I also think that areas which have been the bastion of the state – health and education – are being transformed by entrepreneurs right now. If I fast forward, there is no way in which I can foresee these areas being constructed as industries as they are today in the public sector. They will be driven by entrepreneurs transforming them for the common good by leveraging disruptive economics, consumer data and ecosystem economics in order to serve the people better.”

When Meyer speaks of her father you know why she is so keen to become involved in health. She describes him as her business hero who created a whole industry in America. He was a doctor but created the first pulmonary medical practice and while Meyer says it played “havoc” with his marriage, she says he set her a great model for how hard you have to work to be successful.

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“I have never gone into anything as a businessperson and thought, ‘this is going to be easy’. My father showed me that much.” But the challenges and the ups and downs of working with new businesses have done nothing to dampen her infectious enthusiasm.

“It doesn’t get better than this; even a bad day is a good day. I never have to go to ‘work’, I get to talk to and work with such amazing people. When you see an entrepreneur do something in the market, which they ought not to be able to do, it is the best ringside seat you can ever have.”

For Ariadne Capital, the focus is on building capacity and helping more entrepreneurs grow faster. Meyer talks of turning their work with seven explosive growth businesses to 70. As for her book, Welcome to Entrepreneur Country, she views it merely as a first installment. The second will perhaps deal with the next 10 years of their own explosive growth.